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Smith v. Bi-Lo, LLC

United States District Court, D. South Carolina, Orangeburg Division

December 2, 2019





         This is a common law negligence action based upon Plaintiff Lucretia Smith's (Smith) alleged fall at a local Bi-Lo grocery store. The Court's jurisdiction over this matter is contested; however, Defendants Bi-Lo, LLC (Bi-Lo), Southeastern Grocers, Inc. (Southeastern), and Atlantic West-Bamberg, LLC (AWB) (collectively, Defendants) suggest the Court has jurisdiction under 28 U.S.C. § 1332(a)(1).

         Pending before the Court is Smith's motion to remand this action to the Bamberg County Court of Common Pleas (motion). Having carefully considered the motion, the notice of removal, the responses, the record, and the applicable law, it is the judgment of the Court the motion will be denied.


         On October 21, 2015, Smith visited a Bi-Lo store located at 3386 Railroad Avenue, Bamberg, South Carolina 29003 (the Store). As Smith entered the Store, she allegedly tripped on the corner of a rug causing her to fall. Smith claims several significant injuries as a result of her fall.

         Smith eventually brought suit against Defendants and an unidentified Bi-Lo store manager-referred to in Smith's complaint as John Doe-in the Bamberg County Court of Common Pleas. According to the record, (1) Smith is a resident of South Carolina, (2) Bi-Lo is a Delaware LLC that operated the Store, (3) Southeastern is a Delaware corporation-with its principal place of business in Florida, making it a citizen of both states-that owns Bi-Lo, See 28 U.S.C. § 1332(c)(1) (stating a corporation is a citizen of both the state in which it is incorporated and the state that is its principal place of business) (4) AWB is a South Carolina corporation, who owns the property and the building where the Store is located, and (5) John Doe is a resident of South Carolina.

         Piggly Wiggly Carolina Company, Inc. (Piggly Wiggly) originally leased the Store from AWB through a September 16, 2002, Lease Agreement (the Lease Agreement), which the Court will discuss below. Thereafter, Piggly Wiggly assigned its rights and responsibilities under the Lease Agreement to Bi-Lo through a November 11, 2013, Lease Assignment and Assumption Agreement (the Lease Assignment), which the Court will also analyze below.

         After Smith filed this action, Defendants removed it to this Court. Smith then filed a motion to remand, and Defendants filed their responses. The Court, having been fully briefed on the relevant issues, is prepared to adjudicate the motion.


         Federal courts have original jurisdiction over two types of cases: federal questions under 28 U.S.C. § 1331, and diversity actions under 28 U.S.C. § 1332. Neither party alleges the existence of a federal question, so if this case is removable at all, it must be under the diversity statute. Complete diversity jurisdiction exists when the “matter in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs, and is between . . . citizens of different States.” 28 U.S.C. § 1332(a)(1).

         “[A]ny civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant . . . to the district court of the United States for the district and division embracing the place where such action is pending.” Id. § 1441(a). But, “[a] civil action otherwise removable solely on the basis of the jurisdiction under section 1332(a) . . . may not be removed if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.” Id. § 1441(b)(2).

         In a case such as this, “[t]he burden of establishing federal jurisdiction is placed upon the party seeking removal.” Mulcahey v. Columbia Organic Chems. Co., 29 F.3d 148, 151 (4th Cir. 1994). “From the beginning of the diversity jurisdiction, the rule in actions commenced by plaintiffs in federal court has been that the citizenship of the parties at the time of commencement of the action determines whether the requisite diversity exists.” Rowland v. Patterson, 882 F.2d 97, 98 (4th Cir. 1989).

         The Court is “obliged to construe removal jurisdiction strictly because of the ‘significant federalism concerns' implicated.” Dixon v. Coburg Dairy, Inc., 369 F.3d 811, 816 (4th Cir. 2004) (en banc) (quoting Mulcahey, 29 F.3d at 151). “Therefore, ‘[i]f federal jurisdiction is doubtful, a remand [to state court] is necessary.'” Id. (quoting Mulcahey, 29 F.3d at 151). Moreover, when considering a motion to remand, the Court accepts as true all relevant allegations contained in the complaint and construes all factual ambiguities in favor of the plaintiff. Willy v. Coastal Corp., 855 F.2d 1160, 1163-64 (5th Cir. 1988).


         As the Court noted above, it has diversity jurisdiction in those cases in which the “matter in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs, and is between . . . citizens of different States.” 28 U.S.C. § 1332(a)(1). There is no dispute with regards to whether the amount in controversy requirement is satisfied here. Whether the complete diversity of citizenship mandate is met is the basis of the disagreement before the Court.

         To recap, Smith is a citizen of South Carolina; Bi-Lo is a citizen of Delaware; Southeastern is a citizen of both Delaware and Florida; AWB is a citizen of South Carolina; and John Doe is a citizen of South Carolina. Consequently, if the Court were to look solely at the parties' citizenship, it would conclude there is no diversity jurisdiction, inasmuch as the plaintiff, Smith, and two of the defendants, John Doe and AWB, are citizens of South Carolina.

         Turning briefly to John Doe, Defendants contend his citizenship should be disregarded when deciding the diversity jurisdiction question because of his fictious name. Smith fails to counter Defendants' argument. Regardless, Section 1441(b)(1) provides “the citizenship of defendants sued under fictious names shall be disregarded.” Therefore, because John Doe was sued under a fictious name, his citizenship-for purposes of determining whether removal is proper-will not be considered.

         The primary dispute here is Defendants' claim in their notice of removal that Smith fraudulently joined AWB to defeat diversity jurisdiction. Smith argues in her motion, however, that she did not. As such, she claims there is not complete diversity between the parties, thereby requiring this case be remanded.

         Fraudulent joinder occurs when a removing party demonstrates either, “outright fraud in the plaintiff's pleading of jurisdictional facts, ” or “there is no possibility that the plaintiff would be able to establish a cause of action against the in-state defendant in state court.” Marshall v. Manville Sales Corp., 6 F.3d 229, 232 (4th Cir. 1993) (quoting B., Inc. v. Miller Brewing Co., 663 F.2d 545, 549 (5th Cir. 1981)). Defendants do not allege outright fraud in the jurisdictional pleadings, so if fraudulent joinder exists, it must be because there is no possibility of recovery against AWB.

         “The burden on the defendant claiming fraudulent joinder is heavy; the defendant must show that the plaintiff cannot establish a claim against the nondiverse defendant even after resolving all issues of fact and law in the plaintiff's favor.” Marshall F.3d 229 at 232-33 (citing Poulos v. Naas Foods, Inc., 959 F.2d 69, 73 (7th Cir.1992). A claim need not ultimately succeed to defeat removal; only a possibility of a right to relief need be asserted. 14A Charles A. Wright et al., Federal Practice & Procedure § 3723, at 353-54 (1985).

         Smith makes four primary arguments in her motion in opposition to Defendants' fraudulent joinder argument. The Court will now address each in turn.

         A. Whether the terms of any agreement between the Defendants are unknown, invalid, or otherwise subject to factual dispute.

         Smith argues the terms of any agreement between AWB and Bi-Lo are unknown, invalid, or are subject to dispute. This argument has several subparts.

         First, Smith emphasizes AWB and Piggly Wiggly entered into the Lease Agreement, not AWB and Bi-Lo, and thus the Lease Agreement does not control Defendants' responsibilities with respect to the Store, nor does it provide ...

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